Wouldn’t it be great if you could have your clients spread the word about your great work. Maybe through, say, a testimonial or Google review?

With recent changes to the SEC’s Marketing Rule, your advertising dreams are finally coming true. But what exactly does the rule say, and how will it affect your marketing moving forward? To help you get down to the details, we’ve turned to the experts for their opinion.  

What Does the SEC’s New Marketing Rule Say?

The new Marketing Rule updates include three major allowances:

  • 1. Testimonials and endorsements
  • 2. Third-party ratings
  • 3. Performance advertising

These allowances don’t come without regulations, however. For example, in the case of testimonials and endorsements, you must clearly disclose if the person giving the statement is a client and if they were compensated. But what do these rules look like in practice, and how can advisors maximize their marketing tactics while staying true to compliance? We’ve turned to the experts to get their takes.

Related: The New SEC Marketing Rules: Everything Advisors Need to Know

What Top Marketers are Saying About the Modernized Rule

We asked some of the industry’s top marketing and compliance pros to weigh in on the new SEC marketing rule. Here’s what they had to say:

  • Hot Take #1: The new rule is a little bit of a pain, but …

… It’s a necessary addition:

  • “Additional government requirements are rarely net positive. That aside, advisors will benefit from clarity about regulatory expectations, and, of course, they will naturally continue to review their marketing and sales materials to make sure that they’re clear and accurate.” — Beth Haddock, Chief Legal Officer, AdvisorEngine
  • “Nearly every advisor I’ve talked to has expressed continued hesitance about embracing it. As of now, it’s still in the early stages so caution is definitely warranted. At the same time, I think the firms who get it figured out and establish a clear guide for using testimonials will see an advantage in their marketing.” — Johnny Sandquist, CEO, Three Crowns Copywriting & Marketing
  • “It’s one more administrative duty for advisors to worry about when they should be focusing on helping clients and building their business. But it opens new avenues for how they can use social media and online communications.” — Ali McCarthy, CMO, Skience

In essence, firms with the resources available to explore testimonial uses could greatly benefit from implementing those in their marketing plan. But if your firm is busy scaling growth for current clients, there’s no rush to get in on the action just yet.

  • Hot Take #2: The right RegTech steadies the ship

Adopters are leading others:

  • “[Advisors and firms who are doing it right] are benchmarking what others in the industry are doing, and they are using this as an opportunity to look for efficiencies in operational processes.” — Haddock
  • “Firms have to create workflows and processes that will guide any testimonials they want to collect. It has to be repeatable and something that’s easy to show the SEC to prove compliance. This is probably the biggest opportunity where a firm’s tech solutions can step in to make sure that those communication records are archived and auditable.” — Sandquist
  • “Your tech stack may be more cooperative than you think — are there ways to automate procedures and not have to worry about compliance? … If it’s not, is it the right technology for you? — McCarthy

Here’s the gist: A great way to jumpstart testimonials for your firm is to explore how your technology can automate those processes while also documenting your actions for compliance purposes. 

  • Hot Take #3: Embrace compliance

Comply now to prevent problems later:

  • “Now is the time to train personnel. Educate them about the new expectations. Also test the marketing process to make sure there aren’t any blockers or blindspots about following through on new obligations.” — Haddock
  • “Communicate, communicate, communicate! Don’t leave any room for gray areas in implementing marketing updates. Compliance has to be open to working with advisors to figure out a way to make it happen, and advisors have to be flexible to hear out concerns from their compliance team.” — Sandquist
  • “Advisors need to understand the rule clearly. It’s better to err on the side of caution. But be open-minded! It’s a new world out there. Technology, social media, and the virtual workplace have changed the advisory world drastically from 10 years ago.” — McCarthy

The experts agree: No action isn’t an option. Even if you don’t plan on updating your firm’s marketing strategy to include testimonials just yet, you’ll still need to train all internal employees to avoid compliance errors. SEC regulatory updates often lead to more behind-the-scenes work for advisory firms, but with proper planning and the right tech on your side, you can approach the marketing rule update with confidence.

How Skience Can Help

The WealthTech landscape is constantly evolving. Make sure you have the tools inside your firm to navigate anything that comes your way. 

Skience can help. Contact us today to request a demo.